Correlation Between Kinetik Holdings and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Kinetik Holdings and KeyCorp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kinetik Holdings and KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinetik Holdings and KeyCorp, you can compare the effects of market volatilities on Kinetik Holdings and KeyCorp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kinetik Holdings with a short position of KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinetik Holdings and KeyCorp.
Diversification Opportunities for Kinetik Holdings and KeyCorp
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinetik and KeyCorp is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp and Kinetik Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kinetik Holdings are associated (or correlated) with KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of Kinetik Holdings i.e., Kinetik Holdings and KeyCorp go up and down completely randomly.
Pair Corralation between Kinetik Holdings and KeyCorp
Given the investment horizon of 90 days Kinetik Holdings is expected to generate 1.55 times more return on investment than KeyCorp. However, Kinetik Holdings is 1.55 times more volatile than KeyCorp. It trades about 0.15 of its potential returns per unit of risk. KeyCorp is currently generating about 0.09 per unit of risk. If you would invest 3,181 in Kinetik Holdings on September 4, 2024 and sell it today you would earn a total of 2,560 from holding Kinetik Holdings or generate 80.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinetik Holdings vs. KeyCorp
Performance |
| Timeline |
| Kinetik Holdings |
| KeyCorp |
Kinetik Holdings and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinetik Holdings and KeyCorp
The main advantage of trading using opposite Kinetik Holdings and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings position performs unexpectedly, KeyCorp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in KeyCorp will offset losses from the drop in KeyCorp's long position.| Kinetik Holdings vs. Western Midstream Partners | Kinetik Holdings vs. DT Midstream | Kinetik Holdings vs. MPLX LP | Kinetik Holdings vs. Hess Midstream Partners |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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